State-wise EV Subsidies in India: 2026 Update
A comprehensive breakdown of FAME-III benefits, road tax waivers, and state-specific purchase incentives.
India's EV Incentive Landscape in 2026
India's electric vehicle market is booming — EV sales grew 45% in 2025, with over 1.5 million units sold across two-wheelers, three-wheelers, cars, and buses. A major driver is the layered incentive structure: central government subsidies (FAME-III), state-specific purchase incentives, GST advantages, and income tax benefits combine to make EVs significantly cheaper than their petrol/diesel equivalents.
However, EV subsidies vary dramatically by state. A buyer in Delhi gets substantially more benefit than one in Bihar. This guide breaks down every state incentive currently active in 2026.
Central Government: FAME-III Scheme
The Faster Adoption and Manufacturing of Electric Vehicles (FAME) Phase III, launched in September 2024 with a ₹10,900 crore outlay, provides direct purchase subsidies:
- Electric two-wheelers: ₹10,000 per kWh, capped at ₹15,000 per vehicle
- Electric three-wheelers: ₹10,000 per kWh, capped at ₹50,000
- Electric cars: ₹10,000 per kWh, capped at ₹1,00,000 (for vehicles under ₹25 lakh ex-showroom)
- Electric buses: Up to ₹55 lakh per bus under PM e-Bus Sewa
FAME-III runs until March 2027 and requires vehicles to be manufactured in India with minimum domestic content requirements.
Top State Incentives
Delhi — India's Most Generous EV Policy
Delhi's EV Policy 2020 (extended through 2025-26) offers: 100% road tax waiver, 100% registration fee waiver, purchase incentive of ₹30,000 for two-wheelers, ₹30,000 for autos, and up to ₹1.5 lakh for cars. Scrapping incentive of ₹5,000 for replacing an old ICE vehicle with an EV. Delhi also waived permit fees for commercial EVs and mandates 50% of new last-mile delivery vehicles to be electric.
Maharashtra
Maharashtra EV Policy 2021: Road tax exemption for all EVs until 2025 (expected extension). Early bird purchase incentive of ₹5,000 per kWh for two-wheelers (up to ₹10,000) and ₹5,000 per kWh for four-wheelers (up to ₹1.5 lakh) — available for first 1 lakh EV registrations.
Gujarat
Gujarat EV Policy 2021: Capital subsidy of ₹20,000 for two-wheelers, ₹50,000 for three-wheelers, and ₹1.5 lakh for four-wheelers. 100% road tax and registration fee exemption. Additional 5% interest subsidy on EV loans for individual buyers.
Karnataka
Karnataka EV Policy 2023: 100% road tax exemption for EVs priced under ₹15 lakh. 50% exemption for EVs above ₹15 lakh. Reimbursement of SGST on first 20,000 EV purchases in the state. Special EV zones in Bangalore with priority parking and free charging.
Tamil Nadu
Tamil Nadu EV Policy 2023: 100% road tax exemption until 2030. Capital subsidy of ₹25,000 per kWh for EV manufacturers setting up in TN. The state is positioning itself as India's EV manufacturing hub, with investments from Ola Electric, TVS, and Hyundai.
Rajasthan
Rajasthan REVA 2022: Road tax exemption for EVs, capital subsidy of ₹10,000 for two-wheelers and ₹60,000 for four-wheelers (first 10,000 registrations). 25% subsidy on EV charging station setup costs for private operators.
Income Tax Benefits (All States)
Section 80EEB: Individuals can claim a deduction of up to ₹1.5 lakh on interest paid on loans taken to purchase EVs. This applies to loans sanctioned between April 2019 and March 2025 (expected extension). On a ₹12 lakh EV loan at 9% interest, the annual interest is ~₹1.08 lakh, saving ₹32,400 in tax at the 30% bracket.
GST Advantage: 5% vs 28%+
The single biggest financial advantage of EVs is the GST differential. Electric vehicles attract 5% GST while petrol/diesel vehicles pay 28% GST + 1-22% cess (effective rate 29-50%). On a ₹15 lakh vehicle, the GST difference is ₹3.45-6.75 lakh. This makes EVs structurally cheaper than comparable ICE vehicles even before subsidies.
Use our EV Savings Calculator to compute your total savings including subsidies, GST, road tax, and running costs for your specific state.